inr-bank-notes - INR
  • Indian Rupee (INR) rises after solid manufacturing PMI
  • Manufacturing PMI rises to 54.7
  • US Dollar (USD) rises on hawkish Fed bets
  • US ISM manufacturing PMI slowed unexpectedly

The US Dollar Indian Rupee (USD/INR) exchange rate is edging lower on Monday after booking gains last week. The pair rose 0.08% last week settling on Friday at 76.52. At 18:00 UTC, USD/INR trades -0.05% at 76.48.

Manufacturing activity in India ramped up last month thanks to strong demand as pandemic restrictions were eased. International demand rose to a nine-month high after contracting in March. The manufacturing PMI ticked up to 54.7 in April up from 54 in March.

Demand was boosted by the easing of COVID restrictions after a recent spike in cases. However, a shortage in electricity and rising input costs could impair manufacturing activity in the coming months. Input costs jumped by the most in five months. Delving deeper into the numbers, business expectations were still subdued compared to historical data.

The US Dollar is rising across the board. The US Dollar Index, which measures the greenback versus a basket of major currencies, trades +0.67% at the time of writing at 103.64 building on gains from last week.

The US dollar rose last week for the fourth straight week and is rising again this week pushing the US dollar towards a twenty-year high against a basket of currencies. The greenback has been on the rise as investors look toward the Federal Reserve monetary policy announcement on Wednesday.

Expectations have been rising that the US central bank will adopt a more hawkish tone at the meeting as it attempts to tame forty-year high inflation.

Ahead of the meeting data today was disappointing. US ISM manufacturing PMI for April showed that activity slowed by more than expected, falling to 55.4, down from 57.1. in March. Analysts had expected the activity in the sector to ramp up in April to 57.6. The level 50 separates expansion from contraction.

There is no more high impacting data due today.